Multinational corporations and industrial relations …Multinational corporations and industrial...

Multinational corporations and industrial relations research: A road less

travelledi

Published in the International Journal of Management Reviews, Volume 10 Issue 2

pp. 173–193

David G. Collings, Sheffield University Management School,

University of Sheffield, 9 Mappin Street,

Sheffield, S1 4DT, England.

Tel. +441142223453 Fax: +441142223348

Email. d.collings@sheffield.ac.uk

Multinational corporations and industrial relations research: A road less travelled.

ABSTRACT:

While there is a large body of academic debate surrounding human resource

management issues in MNCs, industrial relations issues often fail to receive the same

degree of attention. This paper attempts to move the debate forward by critically

reviewing some of the key debates surrounding industrial relations (IR) in an

international context. Firstly, some key themes surrounding the comparison of

industrial relations across borders and IR in multinational companies are delineated

and defined. We then consider the reasons why an international IR (IIR) perspective

has been under-represented in the literature to date. The paper then explores the

contribution which an international IR perspective can bring to the study of

management practices in MNCs. This is discussed in terms of IIR’s potential

contribution in terms of an alternative analytical approach and also differences in its

substantive coverage. The impact of IR systems on MNC location and relocation

decisions, key issues for employees, trade unions and managers of MNCs, is then

discussed as an example of the former. We then consider the potential for, and

evidence of, international collective bargaining as a potential counter-balance to the

power the MNC in the global environment as an example of a differing area of

substantive coverage of IIR. Finally some avenues for potential study are outlined.

KEY WORDS: International, Comparative, Industrial Relations, International

Collective Bargaining, MNCs, location, relocation.

INTRODUCTION:

The issue of how multinational corporations (MNCs) manage operations across

national borders has been a long-standing area of academic debate and research. In

this context and writing in the early 1990’s Ferner and Hyman (1992) asked whether

convergence or continuing differentiation was the key characteristic of industrial

relations systems (see also Poole, 1986). This question is arguably even more

pertinent a decade and a half later. Developments in international trade and the

continued growth of foreign direct investment (FDI), illustrated by the fact that in

2005 there were an estimated 77,000 transnational firms with some 770,000 foreign

affiliates engaged in international business (UNCTAD, 2006), mean that

multinational corporations are increasingly operating in multiple countries and thus

are increasingly concerned with the peculiarities of the industrial relations (IR)

systems of the countries within which they operate, and further, their activities effect

the employment experiences of an ever growing number of employees on a global

scale. The understanding of these systems is even more significant given that these

MNCs “are embedded in larger and wider societal collectivities” (Sorge, 2004:118).

Thus, they do not operate in isolation from the environment around them but rather

must organise their activities in the context of the multiple institutional environments

in which they operate. Indeed they may also play a part in constructing these

environments (cf. Boyer et al., 1998; Streeck and Thelen, 2005) which may have a

resultant impact on the experiences of employees in host countries.

In this paper we consider a number of key debates in this regard. Firstly, we define

some key themes surrounding the comparison of industrial relations across borders

and IR in multinational companies. Further we delineate the field of international IR

(IIR) by considering the contribution that IR research can make to the study of

management practice in MNCs and also the reasons why an industrial relations

perspective on MNCs has been underrepresented in the literature. The impact of IR

systems on MNC location and relocation decisions, key issues for employees, trade

unions and managers of MNCs, are then discussed. Next we consider the potential for

and evidence of international collective bargaining as a potential counter balance to

the power exercised by MNCs in the global environment.

While the issues associated with the management of international human resources

have received significant attention in the literature (cf. Briscoe and Schuler, 2004;

Dowling and Welch, 2004; Evans et al., 2002; Morley et al., 2006b; Schuler et al.,

2002; Scullion and Linehan, 2005) industrial relations (IR) issues have not received

the same degree of attention (see: Almond et al., 2005; Bomers and Peterson, 1977;

Cooke, 2003; Ferner et al., 2005; Gennard and Steuer, 1971; Katz and Elsea, 1997, for

some useful contributions). This is somewhat paradoxical as it has been argued that

appropriate industrial relations practices are central in determining labour costs, firm

productivity, profits and ultimately the level of sustainable competitive advantage

within the firm (Katz and Elsea, 1997). Industrial relations practices are also more

likely to vary significantly between different countries than other aspects of managing

employees in an international context such as training and development. Further,

ethical issues surrounding labour management practices may have significant impacts

on the global reputation of MNCs. It has been argued that the emerging significance

of international joint ventures (IJVs) where constituent owners may have vastly

different experience of, and attitudes towards, industrial relations issues, due to

disparate experiences in the home country, mean that industrial relations issues in

these IJVs are a key concern (cf. Katz and Elsea, 1997). Apposite to this, given

industrial relations research focus on the experiences of a range of actors and not just

management, research in this field also has the potential to significantly advance our

understanding of MNCs’ impact on the global environment and in particular the work

experiences of employees.

One plausible explanation for the lack of consideration of international IR issues in

academic literature is the unitarist perspective adopted by much of the North

American literature on management in MNCs, a literature base which has reached an

almost hegemonic position in the field. In this regard, overly prescriptive theoretical

approaches often neglect industrial relations issues completely. In further exploring

the reasons why an IR perspective has been underrepresented in the literature, a

number of key themes emerge. Firstly, the HRM paradigm has become dominant in

the study of the management of employees in recent years and hence the research

agenda in the field has been dominated by HRM research. In this context Towers

(2003) notes that the recent decline in trade union influence combined with increasing

employer power in much of the developed world corresponds with a decline in the

academic standing and study of IR research (see also Bacon, 2003; Kaufman, 2004a;

Kelly, 2003). This creates difficulties for academics in getting published in top tier

journals, particularly in the US context. This has been exacerbated in the UK by the

Research Assessment Exercise whereby academics target higher-ranking (often US

based) journals (Edwards, 2005). There also appears to be a sharper distinction

between IR and HR studies in US universities than in their international counterparts.

This means that key US contributions to the field, such as Bill Cooke’s work on

international IR and Harry Katz’s comparative work, tend to originate outside HR

departments. Further, a number of methodological challenges emerge. Given its

bottom-up focus, IR research often involves gaining employee perspectives on the

topics under study. In this context, gaining access to these employees is generally

more difficult than their managerial counterparts given that management act as

gatekeepers to informants in organisations. Further, IR research often involves

exploring informal aspects of the management of the employment relationship,

particularly in countries characterised by voluntarist traditions (for example Canada,

the UK, Ireland and Italy) where historically much of the employment relationship is

regulated by custom and practice. This makes academic research more complex in

this context. Finally, as P. Edwards (2003b: 16) succinctly notes: “a major theme to

emerge in Britain concerned the lack of deliberate linkages [in IR theory and

research] and the absence of a coherent approach implied by the term ‘strategy’” in

industrial relations research. Thus industrial relations research is more complex and

does not fit with the clean managerial theories often advanced in the context of HRM

and strategy research more generally (see also Hyman, 1987). Indeed, much of this

theory is premised on a micro-level understanding of management action at a firm

level with a failure to account for supra-organisational influences or constraints on

management behaviour.

This paper, attempts to synthesise the enfolding literature base on IR issues and

MNCs and propose some potential avenues for future study. We begin by defining

some of the key terminology surrounding the field.

DEFINING KEY CONCEPTS:

An important point of departure in our discussion is the definition of industrial

relations. While IRii

In contrast, a primary focus of this paper is on the IR issues and problems, for both

capital and labour, arising from the internationalisation of business, and the IR

strategies, policies and practices which firms, employees and their representatives

pursue in response to the internationalisation of business, which we term international

industrial relations. This concerns the factors which impact on the determination of

IR policies and practices within MNCs and which influence the configuration of IR in

subsidiary operations on a global scale. For example, whether an organisation is

ideologically opposed to trade unions and endeavours whenever possible to deal with

workers individually and to determine annual pay increases through individual

performance related pay (for example McDonald’s or IBM) vis-à-vis a firm which

may recognise the right of employees to organise collectively, recognise trade unions

has traditionally been defined as “the institutions of job

regulation” (Flanders, 1965: 4), Salamon (2000: 3) offers a more comprehensive

definition as: ‘a set of phenomena, both inside and outside the workplace, concerned

with determining and regulating the employment relationship’.

We begin by introducing two key concepts within which our discussions will be

framed, namely comparative industrial relations and international industrial relations.

In this regard, there is a large literature base which considers variations between

industrial relations systems in different countries or regions (cf. Ackers and

Wilkinson, 2003a, section 2; Bamber, Lansbury and Wailes, 2004; Ferner and

Hyman, 1998; Morley, Gunnigle and Collings, 2006, section 1). The focus of these

studies is on delineating the IR systems of various countries or regions with a

particular focus on variations between countries or regions in terms of levels of trade

union density, industrial conflict, industrial relations institutions and the like. The

focus of comparative studies is on the phenomena outside the workplace which

determine and regulate the nature of employment relations in specific nation states or

even within regions (for example within the European Union). For example the

emphasis on industry level bargaining and employee participation in the workplace

via works councils which characterise the German IR system vis-à-vis the concept of

employment-at-will and antipathy toward trade unions which underscore the US

system.

and determine pay increases through collective bargaining (for example UPS). Key

activities which would fall under this rubric include trade union recognition or

avoidance, collective bargaining, employee involvement and participation, pay and

performance management and the like.

Clearly some of these topics, particularly the latter two, could equally be addressed

from an international HR perspective. Analyses from these alternative perspectives

would however result in significant differences and an IIR perspective would most

likely emphasise the clash of actors’ interests in the respective areas, a perspective

rare in IHRM studies. The approaches of employees and their representatives in

engaging with the global power of MNCs are also significant in this regard. A further

topic which could fall within the rubric of IIR is the role of international IR

institutions, which operate across national borders, in conditioning the actions of

MNCs. Key relevant institutions include the International Labour Organisation (ILO),

the North Atlantic Free Trade Alliance (NAFTA), the European Union (EU), the

International Confederation of Free Trade Unions (ICFTU), the OECD and the

European Trade Union Confederation (ETUC) (see Blanpain, 2006; Ewing, 2006;

Florkowski, 2006; Rojot, 2006 for a discussion). While many of these institutions

were established, inter alia with a view to regulating trade and the activities of MNCs

on a global scale, the extent to which they can meaningfully do so remains open to

question (Blanpain, 2006). Although a thorough discussion around the role of the

international IR institutions is beyond the scope of the current paper, we will touch on

some of the issues in the context of debates below. Having considered the reasons

why industrial relations perspectives on management in MNCs has been under-

represented in the literature, it is now important to consider the contribution IR

research can make to the study of management in MNCs.

It could be argued that industrial relations research can add to the study of

management in MNCs in two regards. Firstly, it concerns a range of issues which are

often neglected in the international HRM literature, including trade union recognition

and avoidance, collective bargaining, employee participation and involvement and the

like. This can be considered a distinction on the basis of the substantive coverage, or

divergent content of topics covered. Secondly, it offers a different perspective on the

areas under study. This relates to the analytical approach toward the topics explored.

In considering the former there has been a degree of debate as to the respective

definitions and intellectual boundaries of IR and HRM in recent years (cf. Guest,

1987; Kaufman, 2001) and these debates are equally relevant to debates concerning

the distinction between international IR and international HRM. In this regard

Kaufman (2001) postulates that there are those who maintain that IR subsumes HR,

while others maintain the opposite and others still posit that the two are significantly

different entities with little in terms of overlap. In a similar context Bacon (2003)

posits that given the contribution of IR researchers to the field of HR, some may

consider HRM a modern day widening of the field of IR. On balance however we

argue that, while acknowledging areas of overlap between the two fields, they remain

sufficiently different in terms of definition, focus, theoretical and practical orientation

so as to retain different identities and to merit consideration in their own rights.

Kaufman (2001:339) provides an accurate summary of the debate: “HR has largely

severed its links with IR and now is widely regarded as a separate, sometimes

competing and sometimes complementary field of study”. Thus, international IR

research has the potential to provide insights into aspects of the management of

employees in MNCs which are often neglected in the mainstream IHRM literature,

including trade union recognition and avoidance, collective bargaining and the like.

International IR is also distinguished from IHRM through its consideration of the

responses of other IR actors (the State, trade unions, employers organisations,

European works councils etc.) towards managerial strategies in MNCs. Further, IIR

approaches generally recognise the significance of collective groups of employees,

often represented by a trade union, as a pluralist interest group within the firm. Linked

to this, issues of collective determination of employment conditions, represents an

area which is illuminated by IIR studies.

Secondly, international IR research offers a different perspective, in terms of its

analytical approach, to the study of management in MNCs. While acknowledging that

debates surrounding the extent to which industrial relations represents an academic

field in its own right (cf. Ackers and Wilkinson, 2003b; Edwards, P., 2003a; 2005;

Kaufman, 2004a; 2004b; Müller-Jentsch, 2004) the field has undoubtedly something

to contribute to the study of management practice in MNCs. In this context P.

Edwards (2003a; 2003b) convincingly argues that IR is best considered a field of

study as opposed to an academic discipline. Nonetheless he further argues that the key

strength of an IR approach is the willingness among IR researchers to draw on

different disciplines and on this basis the field has developed an analytical approach

which is greater than the sum of the parts. Thus drawing on these disciplines IR

scholars have developed an “analytical purchase on the study of work and

employment which is not available elsewhere” (Edwards, P., 2003a: 339). Particularly

significant in the context of the hyper-competitive global business environment within

which MNCs operate is the fact that IR research is sensitive to conflict, uncertainty

and tension (ibid.) a perspective lacking in most IHRM studies. Indeed, Voss (2001)

points to three significant underlying premises which differ between an IR and an

HRM perspective and again these arguments are equally applicable in the context of

international IR. Specifically she points to: 1). The level of analysis. While HR

research focuses almost exclusively on endogenous factors within the firm, an IR

perspective expands the analysis to exogenous influences, such as the economy and

society (factors which are often neglected in IHRM analyses); 2). The understanding

of conflict upon which the approach is premised. While HRM is premised on a

unitarist understanding of conflict, IR perspectives provide an alternative perspective,

pluralism; 3). The fundamental reason for unions. In this regard an industrial relations

perspective challenges the managerial assumption that trade unions are a response to

bad management or a failure of HR policies. Rather they are a means of redressing the

power imbalance between labour and management (see Lewin, 2001 for a detailed

discussion in the regard).

The consideration of power is one of the key means through which international IR

research can contribute to our understanding of management in MNCs. Writing in the

context of HRM in a domestic setting Bacon (2003: 80) notes: “in short, HRM lacks

not only a theory of bargaining power but a theory of power and as such it cannot

address the question of who gets what [in the distribution of gains in the firm]”.

Indeed, IHRM research has been criticised for its lack of consideration of the

significance of power in management at a multinational level. As Edwards and

Kuruvilla (2005) note, since institutional factors do not have determining effects,

there is scope for organisational politics and power to shape the ways in which MNC

manage their international workforces (see also Geppert and Williams, 2006). They

further note that the impact of power has also been neglected to a large degree in

studies of the global-local debate in IHRM research. Arguably an international IR

perspective, with its pluralist underpinning, would help researchers in addressing

these and other related deficiencies and in advancing theory in the field. As P.

Edwards (2003b: 16) notes: “management, in short, is not only a continuous, active

and uncertain process but also necessarily involves the balancing of forces which are

pushing in opposite directions” (see also Hyman, 1987). While this point is often

acknowledged in IHRM field, given the unitarist underpinning of much of the

research, it is often assumed that these tensions can be overcome through ‘good

management’ and other structural factors without adequate conceptualisation of

exogenous influences and solutions. An international IR perspective may contribute

towards the constructive resolution of these conflicts in management at an

international level.

In illuminating the value of an IIR approach, we now consider a key example of

where an IIR approach can contribute to the literature in terms of, 1). its analytical

approach and 2). its divergent coverage. We specifically focus on issues around MNC

location and relocation decisions in terms of the former and on international collective

bargaining in illuminating the latter.

THE IMPACT OF IR SYSTEMS ON MNC LOCATION DECISIONS:

As noted above, one of the key reasons why managers of multinational corporations

should be cognisant of the industrial relations issues is due to their significance in the

determination of labour costs, firm productivity, profits and even sustainable

competitive advantage. It is also of significance to employees, trade unions and

Governments due to the significance of MNC location decisions, threats of relocation

and regime competition for employees. In this regard, an emerging body of research

has attempted to address the issue of the impact of host industrial relations factors on

MNC FDI location decisions (cf. Borgnanno et al., 2005; Cooke, 2001; Cooke and

Noble, 1998; Kleiner and Ham, 2003). Indeed, the comparison of IR systems in the

context of FDI location decisions is likely to become an increasing important role for

international HRM and IR professionals in the future due to the ever increasing levels

of FDI and IJV activity and the decisions made will have significant impacts on

employees’ work experiences. The power which employees and their representatives

are capable of exercising in influencing these decisions is also a key consideration.

While studies in the area largely classified as comparative studies, insights from other

studies in the IIR tradition also illuminate the debate.

In summarily reviewing this literature base we point to a number of significant trends.

Firstly the key findings of Cooke’s empirical work (Cooke, 1998; 2001; Cooke and

Noble, 1998) can be summarised thus- While controlling for a range of market and

socio-political factors, MNCs choose to invest more in host countries which are

characterised by: (1) greater flexibility to either create or replicate preferred HRM or

labour relations policies and practices; and (2) offer greater net comparative unit

labour cost advantages. Thus host countries with lower compensation costs for

desired skills, less-restrictive workplace regulation, lower levels of union

representation and de-centralised collective bargaining receive higher levels of inward

FDI (see Cooke, 2003 for a synthesis of these studies). Based on their empirical study

Kleiner and Ham (2003: 95) have gone so far as to suggest that:

Given the stronger emphasis on achieving social equity vis-à-vis achieving economic efficiency in most European IR systems relative to the American IR system, EU countries have sacrificed greater FDI inflows and encouraged greater FDI outflows than the United States.

In interpreting the results of these studies one must be cognisant of one significant

caveat. If the principle aim of a multinational’s FDI is market seeking as opposed to

efficiency seeking then the firm’s principle concern in terms of comparing various

location advantages will be on the potential access to a desirable market. This is

demonstrated by Bognanno et al’s (2005) empirical study. Based on their analysis of a

very large sample of US MNCs over more than a decade, they conclude that although

wages and IR environments are statistically significant determinants of MNCs’

decisions to locate in particular countries, “by far the main determinant of MNC

location decisions” (Bognanno et al., 2005: 171) was the host country market size.

This finding lends weight to the argument that in situations where FDI is driven by

market seeking behaviour, access to the host market is more significant than the

restraint within the IR system in determining investment levels. We consider much of

this analysis to be in the comparative IR tradition although it does offer some useful

insights for managers, employees and their representatives.

International IR and HRM professionals have a key role to play in assisting MNCs in

making decisions with regard to their FDI location decisions. Their role in this regard

may not be as straightforward as the previously cited studies would suggest however.

This is because these comparative and largely quantitative analyses fail to pick on

many of the subtleties of the IR environments in host countries and arguably much of

this detail is illuminated by an international IR approach. For instance based on the

aforementioned trends, one could reasonably expect lower levels of US FDI into

Ireland, a country characterised by high levels of national co-ordination in terms of

collective bargaining, high, if falling, rates of union density (union density is currently

just over 37 per cent (CSO, 2005)), and a small host market. Paradoxically however

Ireland received a staggering 25 per cent of all US FDI into Europe and 14 per cent of

all FDI into Europe in the period 1980-1997, figures which are significantly

disproportionate to the size of the economy there (Economist, 1997). In explaining

this paradox it is important to note that the comparative studies outlined above fail to

illuminate the fact that unionisation is largely concentrated in the public sector and

older established industrial sectors and that MNCs establishing there have ample

scope to do so on a non-union basis (cf. Gunnigle, Collings and Morley, 2006).

Further, consistent with the voluntarist principles which underscore the IR system

there, firms have the option to operate outside of national level pay accords and

indeed often do (cf. Gunnigle, Collings and Morley, 2005). Ireland also offers a

gateway to Europe and thus many firms establish there in search of access to the vast

EU market as opposed to the Irish one. Most significantly however in the context of

our discussions is the recent recognition of the power which American MNCs wield

in the Irish context vis-à-vis their trade union counterparts (Collings, Gunnigle and

Morley, forthcoming; Donaghy, 2004; Gunnigle, Collings and Morley, 2006).

Donaghy’s (2004) recent work on social partnership specifically points to the

influence of US MNCs on Irish public policy, indicating that their influence extended

to the social partners who were involved in the negotiation of the national partnership

agreements which have dominated Irish IR in recent decades. Donaghy found that the

MNC sector significantly influenced the social partners’ approach to institutional

change, leading them, for example, to reject any type of works council arrangements

along German lines. Collings et al. (forthcoming) also point to the power which US

MNCs exercise in terms of influencing public policy in Ireland. This is achieved

through lobbying of Government both directly and through key employers

organisations and the American Chamber of Commerce.

Indeed, Collings et al. (forthcoming) concluded:

while the trade union movement does appear to have a large degree of cross party political support [in Ireland], when this is stacked up against the influence of the FDI sector, it often loses out in policy terms.

In considering the shift in the balance of power away from trade unions in the Irish

context, the trend has been buttressed by the relative economic significance of US

MNCs there and the desire among key stakeholders to ensure this investment is not

threatened by increased levels of employment regulation (Collings et al., forthcoming;

Donaghy, 2004; Gunnigle et al., 2006). Interestingly, it has been argued that policy

makers and trade unionist representatives alike have a preference for having sensitive

matters with regard to employment regulation addressed at a European level so as it

would not single out Ireland in the European context and threaten US investment

(Collings et al., forthcoming; Wallace, 2003). Further, it provides insights on the

significance of power relationships between Governments, trade unions and MNCs in

explaining location decisions of MNCs. It also illustrates the key role that

international institutions, in this instance the EU, can play in ensuring the balance

between achieving social equity for employees and achieving economic efficiency

and attracting foreign investment to nation states. Finally, it points to the key

challenge for trade unions in engaging with MNCs on a global scale due to the

significant bargaining power which MNCs display in their interactions with the

governments of nation states.

Indeed, while the value of an international IR approach is evident in discussions on

the location decisions of MNCs, it is even more evident and appropriate in discussions

on multinational relocation decisions where management have to deal with the

resistance and actions of existing employees and unions very directly, as opposed to

the workforce as only a potential actor in initial locations decisions. Thus, this area is

particularly fitting to an IIR perspective, as it is particularly illustrative of the power

relations between pluralist actorsiii. Thus the topic merits a summary review.

The topic of multinational relocation is also an example of an area where industrial

relations researchers draw on other disciplinary areas, namely labour geography,

although this cross-fertilisation has developed only recently (see Herod, Peck and

Wills, 2003; Zeller, 2000). As Herod et al (2003: 176) note, “for their part

geographers have been in pursuit of a more active and finely grained analysis of the

roles of labour in the process of economic restructuring and, more generally in

remaking the geographies of capitalism”. The analysis of MNCs’ power in shaping

the space within which they operate on a global scale, is central to the analysis of

MNCs relocation decisions in this analysis (Herod, 1995; Zeller, 2000). Indeed, the

issue of power relations between MNCs and labour, the significance of social

dumping and the key role of international labour standards in somehow balancing the

interests of capital and labour on a global scale are key themes in debates around

global relocation of multinational operations.

Intuitively it is apparent that the majority of MNC relocation involves the shifting of

production from high-wage or developed countries to low-wage or developing

countries, a process which Dicken (2007) considers part of the ‘global shift’. Indeed,

it is perhaps unsurprising that the developing Eastern Europe was the only region

globally where FDI inflows did not decrease in the two years following 9/11

(Marginson and Meardi, 2004; UNCTAD, 2004). This is of course not the only

rationale for MNC relocation and other reasons include market access, as products

develop through their life cycles (Vernon, 1995), location specific advantages where

the MNC location is determined by the availability of specific advantages, such as

fertile land, high quality labour, sound infrastructure etc. in particular countries

(Porter, 1990) and the like. However, Young, Hood and Firn (2001: 5) argue that we

have only “a limited understanding of the context within which, and the process by

which divestment and relocation occurs”. The field of international industrial relations

is however one which has contributed to the literature in this area. Key in these

analyses is the exploration of the power relations between global MNCs and generally

local labour representatives. As R. Edwards (2003) notes, in circumstances where

MNCs relocate operations from one country to another, negotiating power rests

primarily with management. In many instances, the trade union’s role is generally

limited to the negotiation of redundancy payments and assisting employees in their

search for a new role. Further through simply raising the possibility of plant

relocation, management can pressure trade unions to agree to lower wages or changes

in working arrangements (Edwards, R., 2003). On balance this literature reinforces

the conclusion that labour markets are locally constructed and labours’ influence

largely limited beyond the local context, whereas capital is much more often globally

constructed (Herod et al., 2003).

Addressing this power imbalance is a key challenge for trade unions moving forward

and we now turn to international collective bargaining, which could be considered a

key strategy for labour in challenging the power of MNCs at a global level, and

further an example of the divergent coverage of an international IR approach.

INTERNATIONAL COLLECTIVE BARGAINING:

The pressures for international dimension to collective bargaining

Martin and Ross (1998: 247) argue “historically unions had to expand the

geographical scope of their action to keep pace with growing markets [at a national

level] to prevent employers undermining wage and labour standards by pitting

workers against each other”. More recently, as capital has becoming increasingly

global and indeed mobile, largely through MNCs, it appeared natural that organised

labour would adjust and extend its influence to the international arena and attempt to

re-align its negotiating position vis-à-vis the powerful MNCs which it bargains

against (Rojot, 2006). The aim of such developments are to facilitate a forum whereby

trade unions can bargain effectively with MNCs despite geographic dispersion

(O’Brien, 2000). However despite the expectation that the evolution from national

level bargaining to international level bargaining may represent a natural progression,

in a similar vein to the aforementioned evolution from local to national level

bargaining, the extension to international level has yet to materialize to a significant

level (Rojot, 2006: 254). This evolution towards international collective bargaining

has been slow however and it has been argued that only since the 1970s have we

witnessed the emergence of any significant interest in building a system of

international collective bargaining (O’Brien, 2000: 546). Rojot (2006: 261) goes as

far as to suggest that there has been “no real ‘collective agreement’ properly

speaking…signed at an international level, involving reciprocal duties and

commitments by the parties with an efficient means of enforcement”. He does point

to the possible exception of the 1967 case of the United Auto Workers-Chrysler

collective agreement, which covered employees in the USA and Canada, under very

specific conditions.

In explaining the requirement for global coordination among labour representatives

we point to a number of significant drivers. A key underlying theme is that higher

level of international coordination is key to challenging the global dominance of large

MNCs. Specifically, as discussed above, there is a growing body of evidence which

points to the use of capital mobility to undermine labour organisation (Babson, 2003;

Bronfenbrenner, 2000; Huxley, 2003), and indeed the structuring of labour standards

and working conditions in nation states may be viewed as a key form of regime

competition (Streeck, 1992), as nations compete aggressively for inward foreign

direct investment (Ewing, 2006; Le Queux and Fajertag, 2001; Schulten, 2003).

Thus, labour’s opponent is increasingly using the global business environment as

leverage in the bargaining process and as nation states compete aggressively for

inward foreign direct investment often through the erosion of labour standards. If

labour is to effectively bargain in this field, it needs to cooperate effectively on a

global basis. It is generally agreed that international institutions and labour

organisations have a key role to play in the establishment and maintance of

international labour standards as a means of counterbalancing the power of MNCs in

lightly regulated host countries, although their success in doing so is open to question

(see Blanpain, 2006; Bognanno and Lu, 2003; Brown, 2001; Ewing, 2006; Martin and

Maskus, 2001).

A further threat to labour’s position in the global landscape is the shifting of MNC

organisation from nationally organised structures towards the international business

division which facilities the aforementioned comparisons. As Marginson and Sisson

(1996: 9) note:

The primary axis of international organisation is shifting away from the national subsidiary, which groups all business operations within a particular country, and towards the international business division, within the same stream of business across different countries.

Further, the impact of large MNCs’ increasing use of comparisons of performance

indicators in foreign subsidiaries as a means of leverage in negotiating increases in

productivity, rationalisations and cost savings in sister plants in different countries is a

key challenge to trade unions at a national level. These coercive comparisons are

particularly prevalent in sectors which utilise high levels of vertical integration in the

production process (Edwards, Rees and Coller, 1999). There is a real fear that such

comparisons can result in downward pressures on employment terms and conditions

in MNCs (Schulten, 2003).

In exploring the historical evolution of international collaboration between trade

unions we point to a number of key trends. Firstly, it has been argued that trade

unions emerged onto the international level at a broadly similar time as their

counterparts in private enterprise at the early stage of industrial capitalism (O’Hagan,

Gunnigle and Morley, 2005). These vanguard international trade unions were

embodied in International Trade Secretariats (ITSs) which prospered with the launch

of the International Labour Organisation in the aftermath of the First World War.

They continue to operate to the current day, with prominent examples including the

International Metalworkers Union and the Chemical, Energy, Mine and General

Workers’ Union (O’Brien, 2000). Their role was, and remains, limited however, with

a focus on sharing information and the promotion of cross-national labour solidarity

in the context of the growing importance of international firms, and significantly did

not extend to any attempt at international collective bargaining (Ewing, 2006;

O’Hagan et al., 2005).

More recent evolutions in international collaboration between trade unions continue to

be more limited in scope than international collective bargaining. In this regard, the

literature identifies plenty of examples of information sharing amongst trade unions

from different countries and initiatives aimed at the development of officials and even

some attempts at globally coordinated campaigns against employers (Juravich and

Bronfenbrenner, 2003; Gennard and Ramsay, 2003; Rojot, 2006) although the level of

coordination does appear to differ between sectors (Arrowsmith and Marginson,

2006; Gollbach and Schulten, 2000; Hollingsworth, Schmitter and Streeck, 1994; Le

Queux and Fajertag, 2001). A prominent example of transnational coordination

among trade unions is the case of the US Steelworkers’ successful campaign against

Bridgestone-Firestone’s attempt to de-recognise unions in American plants. Juravich

and Bronfenbrenner (2003) argue that, in addition to standard resistance to the plans

and the leverage of power at the national level, the Steelworkers’ union embarked on

an aggressive and effective transnational strategy of escalating confrontation. This

was manifest in terms of the enlisting of support from trade unions in Japan (the

corporation’s home country), Europe and Latin America, the picketing of the

Japanese Embassy in the US and the corporation’s regional headquarters in Brussels,

a coordinated ‘International Days of Outrage’ campaign and a ‘cyber picket’ where

the company was flooded with email protests. It is clear that this degree of

coordination is the exception rather than the rule and Juravich and Bronfenbrenner

(2003) posit that the global effect of the Steelworkers’ campaign could provide a

model for transnational union resistance to large and powerful MNCs. Clearly

however it still falls short of international collective bargaining. Indeed, on balance

the literature on international collective bargaining suggests that at present evidence

of widespread success in initiating international collective bargaining arrangements

are limited.

One area where prospects for international collective bargaining have been more

sanguine is the European Union which we now explore.

The European Cross-border Dimension to Collective Bargaining

While the preceding review has suggested that the prospects for international

collective bargaining are limited, the European Unioniv (EU) represents a region

where the outlook for international collaboration, at least at the surface level, is more

optimistic. This optimism derives from to a number of political and structural features

of the European Union. Specifically, through European Monetary Union (EMU), we

have witnessed the opening of markets within the member states of the EU. The

introduction of a common currency has facilitated trade within the region and indeed

the comparison of performance between multinational subsidiaries. Further, the

facilitation of a common framework of labour legislation through EU Directives has

resulted in a degree of convergence in labour standards among member states

although significant differences remain. However, owing to the fact that these

Directives only set objectives and allow the member states to decide how to achieve

the objectives in practice, it is recognised that while they do facilitate the

harmonisation of national labour laws, the impact of the directives in promoting

convergence is comparatively limited (Rojot, 2006: 264). Recent decades have

however resulted in an increasing focus on the social dialogue agenda of the EU

which is resulting in the development of a social and labour relations framework at

the Community level (Rojot, 2006). Key examples in this regard include: the Val

Duchesse meetings between the EU (then EEC), the UNICE, CEEP and ETUC

designed to promote Europe-wide dialogue between labour and management; The

Single European Act; the European Charter of Fundamental Rights and; the Social

Protocol attached to the Maastricht Treaty (Rojot, 2006). Finally, the emergence of

European Works Councils (EWC) means that MNCs with 1000 European employees

and more than 150 employees in two member states must establish a EWC to secure

information and consultation rights for employees on transnational company matters

has the potential to facilitate collaboration among employee representatives at a

regional level. (EWCs represent a further example of the divergent coverage of an IIR

approach, although a detailed discussion of their operation is beyond the scope of the

current paper.)

Keller (1995: 124), writing in the mid 1990s, argued that “the development of a

related structure [at a European level] for collective bargaining will become necessary

and unavoidable”, in the context of European Monetary Union. We now review the

extent to which this prediction has materialised and the extent to which European

collective bargaining (ECB) has become a reality. In this regard, there is a large body

of literature which explores the experience of European collective bargaining. On

balance this literature points to limited evidence of advanced forms of collective

bargaining at a European level (Arrowsmith and Marginson, 2006; Gollbach and

Schulten, 2000; Le Queux and Fajertag, 2001) although there does appear to be some

evidence of limited success in specific sectors (Arrowsmith and Marginson, 2006;

Marginson and Sisson, 2002). More recent contributions seem to be less upbeat than

Keller, and as O’Brien (2000: 546) notes: “despite high levels of economic

integration, geographic proximity and an overarching institutional structure in the

European Union, the obstacles [to European level collective bargaining] are

immense”. A view shared by Le Queux and Fajertag (2001) who conclude based on

their study of the chemical industry that, while there is no lack of impetus for

European collective bargaining, there is but modest progress in practice. While

Marginson and Schulten (1999: 28) conclude that the prospect of the development of

pan-European collective bargaining structure is at best “distant”.

As noted above however we can witness some attempts at European collective

bargaining in specific sectors. Indeed, Le Queux and Fajertag (2001) postulate that

the sectoral level is the most appropriate target for European trade unions in

attempting to develop ECB. In this context what evidence can we unearth of this pan-

European collaboration and does it represent ECB?

One sector where we have witnessed some attempts at ECB is in the automotive

sector. This sector is dominated by a small number of large MNC producers and is

characterised by a strong tradition of production integration across national borders

and developed links with component suppliers (Marginson and Sisson, 2002). Further,

recent years have heralded significant rationalisation of operations, through mergers

and acquisition and international joint ventures, in the sector and in the European

context many firms have shifted production to plants in Eastern and Central European

countries, many of which have recently, or are in the process of, joining the EU

(Marginson and Meardi, 2004; Meardi, 2006). The implications of managerial

decision making in the automotive sector in the European context, are increasingly

concerned with a pan-European level and thus trade unions are increasingly required

to engage with issues on this level.

Marginson and Sisson’s (2002) research points to a European dimension to collective

bargaining in the automotive sector. Interestingly however, particularly in the context

of the ETUC’s decision to delegate primary responsibility for coordinating collective

bargaining at the European level to European Industry Federations (EIFs)v,

management appeared to be the primary drivers of this trend. Further, this European

dimension was relatively limited and was primarily restricted to pacts for employment

and competitiveness (PECs) whereby management, in an attempt to restructure costs

and capacities to meet changing market conditions, agree with trade union tradeoffs

between flexible working practices for training and increased employment security,

and coercive comparisons (Marginson and Sisson, 2002; Sisson and Artiles, 2000).

These initiatives were largely targeted at gaining changes in working practices and

working time arrangements in return for future managerial commitments on

production and investment for the plant concerned, with the implication that those

sites which aimed to maintain investment and employment would have to position

themselves as the best in their group on the basis of company determined performance

indicators (Marginson and Sisson, 2002). In contrast, Marginson and Sisson found

that the trade unions’ use of cross-country comparisons was much less developed than

on the management side, with coordination limited to some information sharing on

company level agreements through the EWC. Thus while there is some evidence of a

European dimension to collective bargaining in the automotive sector, it is

management driven and limited in scope and clearly does not equate to international

collective bargaining.

A further sector where there is some evidence of a European dimension to collective

bargaining is the metal working sector. Indeed, Gollbach and Schulten (2000: 162)

argue that the European Metal Workers’ Federation (EMF) has the “most-developed

proposals for European coordination of national collective bargaining”. Le Queux

and Fajertag (2001: 118) posit the EMF is at the leading edge in terms of

internationalisation and is the exception rather than the rule, in terms of its level of

international coordination. In acknowledging the significant European slant on the

EMF’s operations, it still has had a limited impact in terms of ECB. However moves

towards coordination of activities at the European level started at an early stage, and

following the adoption of the Maastricht Treaty in 1993, the EMF issued a Statement

of Principles on Collective Bargaining Policy which represented its first attempt to

formalise a comprehensive ECB policy (Gollbach and Schulten, 2000). Since then the

Federation has consistently pursued a policy of emphasising the “substantive criteria

for solidarity-based collective bargaining in Europe” and the formation of “a

European framework for national collective bargaining by developing common

demands and positions” (Gollbach and Schulten, 2000: 162). The EMF has a number

of developed mechanisms for sharing information among national affiliates and has

established some programmes aimed at helping union officials to gain experience of

bargaining in different national contexts.

Arrowsmith and Marginson’s (2006) analysis of ECB in the metalworking industry

concluded that the international dimension to collective bargaining was evident

through managements’ use of coercive comparisons in national bargaining. Thus, they

argue that management and employee representatives were acutely aware of the

European and even the international corporate context within which local negotiations

evolved. Similar to the automotive unions discussed above, Arrowsmith and

Marginson found that the trade unions’ attempts at benchmarking and international

networking were less developed than their managerial counterparts. These limitations

were traced to resource constraints, multi-unionism resulting in divisions, a lack of

compulsion and structural factors. Further, they identified the role of European works

councils in strengthening pre-existing international networks and forging new ones

among employee representatives. The EWC also impacted on ECB through the

completion of European framework agreements/understandings which define

parameters and principles for local and national company negotiations and through

the collation and dissemination of information and employment practices and working

conditions in different countries which proved useful in local negotiations.

Thus, although we can see some innovations in international collaboration within the

metal working sector, it again appears that management coordination appears more

developed than their trade union counterparts. We now explore the factors which are

advanced to explain the failure of the evolution of international collective bargaining

to the global arena.

Explaining the Failure of International Collective Bargaining

The reasons for the trade unions’ failure to develop effective international collective

bargaining mechanisms are manifold and we categorise them under a number of key

themes (see also table 1). Firstly, we point to structural difficulties.

TAKE IN TABLE 1 APPROXIMATELY HERE

Structure:

While international trade union organisations and other labour representative bodies

have the capability to formulate co-ordinated collective bargaining policies and

positions for international affiliates, they are powerless in ensuring affiliates’

compliance with these positions. They have no power of sanction over affiliates who

withdraw from these positions, in the pursuance of the individual affiliate’s self-

interest (Gollbach and Schulten, 2000; O’Brien, 2000). Linked to this, national trade

unions are generally reluctant to delegate power upwards to international trade unions

for decision making (De Nijs, 1995). Further, there is a general recognition that there

has been a failure and indeed a lack of desire among international employers

organisations to engage with trade unions on an international level. Indeed, these

international employers organisations generally focus on three goals: lobbying on

behalf of business and capital at an international level; the representation of members

(employers) in international tripartite bodies such as the International Labour

Organisation and; monitoring and developing international guidelines, such as those

drafted by the OECD and international collective bargaining does not feature highly

in their priorities (see, O’Hagan et al., 2005; Rojot, 2006).

Next we point to the significant structural and institutional differences in national IR

arrangements which make co-ordination more difficult. Key in this context is the fact

that collective bargaining can be co-ordinated at a plant, national, sectoral or even a

national level. This makes international collaboration difficult. Further, fragmentation

between unions means that unions from countries where the union movement is

strong may fear exploitation by weaker counterparts, while unions emerging from

weaker environments may fear being dominated by those from stronger ones (van

Roozendall, 2002). Finally, Rojot (2006) points to the lack of an available framework

or forum for international collective bargaining, which results in legal and practical

difficulties, combined with a lack of available enforcement mechanisms for

international collective bargaining agreements.

Next we turn to political factors which retard the development of international

collective bargaining.

Political:

There is little doubt that national industrial relations systems remain significantly

different (Ackers and Wilkinson, 2003a; Bamber et al, 2004a; Morley et al., 2006a).

Indeed, O’Brien (2000) points to the three faces of industrial relations which the

international union movement faces in the global environment, namely social

democracy, neo-liberal and authoritarian. While a detailed discussion of each type is

beyond the scope of this paper, it should be clear that each of these alternatives has a

significant impact on the role and scope of trade unions in each national context.

Further, labour’s favoured form of regulation, social democracy, is being replaced by

neo-liberal and authoritarian regimes in many developed economies (O’Brien, 2000).

These differences in national industrial relations systems are also reflected in the

structure, power and status of individual actors within the system. For instance trade

unions hold a relatively powerful position within the Scandinavian IR model while

their role is much more limited in the US context. This leads to divisions with regard

to international collaboration within the labour movement and also a limiting of

possibilities of the exercise of power by the international labour movement in neo-

liberal and authoritarian contexts.

Further, international trade unions have generally been limited to a representative role

within key international institutions, such as the EU, and have failed to developed

power broker relations in these institutions (O’Hagan et al, 2005). This has limited

their influence at an international level. Linked to this point, the international labour

movement is generally not allowed direct access to powerful intergovernmental

institutions such as the WTO. Hence they must rely on national government to

represent their interests to these institutions (van Roozendall, 2002: 22).

Significantly, the interests of government may not always be closely aligned with the

union movement.

Next we turn to the challenges presented by social and identity issues.

Social/Identity

A further key challenge to the development of the international labour movement and

in particular international collective bargaining is the lack of identity that individual

employees have with their international representatives. It has been argued that union

activists and labour observers view peak international organisations such as the

ICFTU as bureaucracies “three times removed from their own concerns (locals,

nationals, internationals)” (O’Brien, 2000: 542). They also perceive these peak

associations to be more conservative than activists at the local level. Linked to this

point, there is a general lack of solidarity among actors at a national level. Rojot

(2006) doubts the existence of any significant degree of effective solidarity at an

international level and suggests that building solidarity among international workers is

much more difficult than doing so among workers at a national level. He points to the

“lack of reactions, beyond weak protests and symbolic demonstrations, to production

transfers and/or plant closures by multinational companies across borders” (263).

Further, Lévesque and Murray (2002: 54-5) point to new sources of divisions within

the labour movement which exacerbate the challenges of building solidarity. These

divisions include competition between plants in competitor and even at times the

same companies, as well as between workers with typical and atypical jobs for

employment and production mandates globally. These divisions present a challenge

for trade unions as they buttress fragmentation between and within trade unions and

indeed reinforce differentiation between workers. Specifically, managerial threats to

relocate production may result in unions being pressured to engage in competitive

alliances with management at the expense of solidarity with other workers (see also

Grenier, 2006: 78). In a similar vein, Kim Moody (1997) points to the geographic

north-south divide, whereby the south is locked into the role of low cost

producer/supplier for corporations based in the north. This division, he argues, leads

to a race to the economic and social bottom for workers globally and perpetuates a

lack of labour solidarity between workers in the developed north and the developing

south. While at the time he was writing, he suggested a subtle shift in labour solidarity

between those in the north and the south the extent to which this has materialized is

questionable. There are also endemic cultural and social and language differences

between citizens in different countries resulting in reducing the extent of a shared

identity among employees on an international level.

Turner (1993) also points to the pre-occupation of national actors with particular

national issues in explaining minimal international collaboration among trade unions

in the EU context. At the time he was writing he identified the preoccupation of

German unions with the challenges following the fall of the Berlin Wall as a key

example in the regard. This is understandable since only a relatively small percentage

of trade unions’ total membership will actually be employed in MNCs.

Power and knowledge: A final theme which emerges in the consideration of the factors which retard the

development of international labour collaboration is with regard to power and

knowledge issues. Firstly, while labour’s power remains local in scope, as illustrated

by the discussion above, capital has become more global in nature and decisions

effecting employees are increasingly being made at a supra-national level (Marginson

et al, 1995). Thus, the locus of MNCs’ decision making extends beyond national

borders and key information is rarely transparent or available to trade unions (De Nijs,

1995). Further the well-rehearsed argument that MNCs can counter the power of local

unions by threatening to shift production to a different location in an attempt to out-

manoeuvre trade unions or following threats of industrial action is significant here

(Rojot, 2006).

Secondly it appears that international trade unions and, even more general attempts at

international coordination among trade unions, appear to have, on balance, pursued

quite limited goals. Specifically much attention appears to have been focused on

issues such as information sharing, building cross-border alliances, developing

expertise on regional and other transnational policies and the like with little real

attention paid to building global or indeed regional collective bargaining structures.

Notwithstanding the limited “success” of international collective bargaining identified

above, the literature on international collective bargaining does provide some

important insights and indeed should help to elucidate the contribution of an IIR

approach in terms of addressing a range of issues which are often neglected in the

international HRM literature. This example of the differing substantive coverage of an

IIR approach illustrates the alternative focus which an IIR approach can bring to the

international management literature. Specifically, the responses and perceptions of a

wider range of actors, rather than just management, are considered. Secondly, it

emphasises power and actor interests and their impact on MNC operation and thus

moves beyond purely rational economic managerial prescriptions. Finally, it

acknowledges the impact of wider institutions on MNC operations, a perspective

often lacking in the IHRM literature. These perspectives are important to managers

and academics alike, and given the continued significance of worker collectives and

the increasing reach of international institutions such as the European Union, this is

unlikely to diminish in the future.

CONCLUSIONS:

In synthesising the preceding review, it is important to make a number of

observations. Firstly while there is a relatively long tradition of academic study of

comparisons between IR systems more generally (cf. Dunlop, 1968 or more recently,

Thelen, 2001), there is a lesser degree of pedigree in the study of international IR.

Perhaps this is not surprising, as the academic study of industrial relations itself has

been plagued by the criticism that it lacked a theoretical framework for analysis.

Thus while IR in general terms has been criticised for its lack of a unifying

framework, international IR as a sub discipline is the early stages of development as

an academic field (the contributions of Cooke, 2006 and Edwards and Ferner, 2002

are however useful developments in this regard). The topic merits further study due

to the significant impact which IR issues may have on the working lives of individuals

in nation states. Further legislators and organisations face complex choices in

balancing the needs of citizens with providing an attractive institutional framework

for inward investing MNCs. Thus further study could illuminate these debates.

The preceding review suggests that MNCs continue to hold the balance of power

compared to their labour counterparts in the global economy, a conclusion which is

illuminated through studies in the IIR tradition. These MNCs exercise this power

through locating plants in countries with what they consider to be less restrictive

labour environments, through lobbying governments in host environment and

international institutions, through the comparison of performance across the MNC and

the squeezing of costs in subsidiaries through coercive comparisons and threats to

relocate production. Labour appears to be struggling to counter the MNCs’ power in

the global environment, a challenge that owes in part to their failure to organise

effectively on a global basis. The review also highlights the key role which

international institutions have in balancing the rights and needs of employees with

those of MNCs. We argue that an IIR perspective has proved useful in illuminating

these debates through addressing the issues from an alternative theoretical focus and

also examining issues which are often under-explored in the more general

management literature.

In advancing the study and the theory of international and comparative industrial

relations researchers could focus on a number of potential avenues of study. Firstly in

advancing the field of comparative IR, research could focus on the study of regional

variation in IR practices. This is likely to become particularly significant in the future

due to the increasing regionalisation of international industry and trade. In this regard

Rugman (2000) has argued that of the world’s largest 500 MNCs, 430 had their

corporate HQ in the triad of regions of North Atlantic Free Trade Association

(NAFTA), the European Union and Asia. Further, Rugman and Verbeke (2004: 16)

posit that an average of 80 per cent of most large MNCs’ sales are concentrated in

their home triad region. From the perspective of comparative IR it is plausible to

argue that the influence of supranational institutions such as the EU may have

significant impact on the configuration of the IR institutions of a particular nation

state and thus IR may, in the future, be best conceptualised at a regional level,

particularly in the EU. Further it is plausible that many MNCs will concentrate their

operations and managerial effort at a regional level and thus will be primarily

concerned with IR issues at a regional level as opposed to a national or indeed global

one. Indeed a number of emerging contributions appear to indicate a shift in this

direction (cf. Kaufman, 2004a on the academic development of IR; Morley et al.,

2006a section 1 on broader comparative issues). Further, academic study could focus

on developing comprehensive, well-developed and integrative models of industrial

relations at a national or regional level. While Dunlop’s systems theory (1958) has

represented a key theoretical contribution to the field, it is not without its limitations

and advanced integrative, and empirically based models could significantly advance

theory and practice in the field (cf. Kaufman, 2004a; 2004b. Müller-Jentsch, 2004).

A number of broader international business trends also present opportunities for

further advancement of the field. Specifically empirical studies in the context of the

emerging markets of Eastern Europe and the increasingly open Chinese economy,

economies which present their own unique challenges, would represent useful

additions to the literature. In a similar vein empirical study of the IR challenges

associated with the ever increasing number of small and medium firms which are

internationalising would represent an advancement on the extant literature which

focuses exclusively on large MNCs. Further the impact of innovative IR policies and

practices on the industrial relations frameworks of these economies represents a

useful avenue for future study. As noted above studies in the political science tradition

offers potential in this regard (cf. Streeck and Thelen, 2005; see also Redding’s

(2005) recent call for international business (IB) researchers to compare social

systems of capitalism in IB research). Finally due to the exponential growth in

mergers and acquisition and international joint ventures in the international context

researchers should examine the IR challenges and opportunities associated with such

activity.

In conclusion the field of comparative and international industrial relations and

particularly the latter offer boundless potential for theoretical development. In a

similar vein to the broader field of industrial relations, there is a significant

requirement for theoretical development in both areas and due to ever increasing

levels of foreign direct investment. In this regard the significance of an international

IR perspective and the opportunity for academic study in this tradition is unlikely to

diminish for the foreseeable future.

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Table 1: Factors which retard the development of international collective bargaining EXPLANATORY FACTOR

DISCRIPTION

Structural • Structural differences in IR arrangements in different countries.

• Failure and lack of desire among international employers organisations to engage with trade unions on an international level.

• The difficulty of regulating national trade unions, by international trade union organisations. Lack of sanctions for failure to implement international policies at local level.

• Reluctance among national trade unions to delegate power upward to international trade unions

• The lack of available forum or framework for international collective bargaining combined with a lack of enforcement mechanisms for international collective bargaining agreements

Political • Trade unions’ favoured form of regulation, social democracy is being eroded by neo liberal and authoritarian ones in most developed economies.

• International employee organizations limited to a representative role within many international institutions such as the EU: they have never developed power broker relations

• Due to lack direct access to powerful intergovernmental institutions such as the WTO, they rely on Government to represent their interests.

Social/Identity • Lack of identity with global representatives- three times removed- local trade union to national level to international level.

• Less developed solidarity at an international level • New sources of division within the labour market • The preoccupation of national actors with specific

national problems. • Language and cultural differences

Power/Knowledge • MNCs have a knowledge advantage over their labour opponents. They can make decisions with letting employees know what major decisions are in the pipeline.

• International trade unions have generally pursued a limited agenda in terms of the goals of international collaboration.

Source: Adapted from various sources.

i The author acknowledges the funding of the Irish Research Council for the Humanities and Social Sciences in supporting the development of this paper. The author is also grateful to Marian Baird, Anthony Ferner, Paddy Gunnigle, Johathan Lavelle, Mike Morley, Adrian Wilkinson, Goeff Wood and the three anonymous referees for their constructive and challenging comments on earlier drafts of this paper. Any errors remain my own. ii Although they are often differentiated between, I will use employee relations and industrial relations interchangeably throughout this paper. iii The author is grateful to an anonymous reviewer for suggesting this topic. iv The European Union (then European Coal and Steel Community) was formed in 1951 with an initial six members of Belgium, West Germany, Luxembourg, France, Italy and the Netherlands. Owing to the success of this initial initiative, in 1957 the Treaties of Rome were signed which expanded the industries covered and created the European Atomic Energy Community (EURATOM) and the European Economic Community (EEC). The initial steps toward removing trade barriers were made at this time. In 1973, Denmark, Ireland and the UK joined, 1981 Greece, Spain and Portugal in 1986, Austria, Finland and Sweden in 1995. 2004 however saw the biggest expansion with ten new members. A number of new additions are also expected in 2007. v At its 1999 congress the ETUC determined that primary responsibility of the coordination of collective bargaining at the European level would be delegated to its 14 European Industry Federations (EIFs) (see Le Qeux and Fartertag, 2001).

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